Private label sales top $230B in 2023.

Lately, there was an investigation conducted by the Private Label Manufacturers Association (PLMA) in conjunction with marketing researchers from Circana that may show a stabilization of private label sales volatility. The numbers indicate that in just one year sales rose up 4.7% to $236 billion for the United States as compared to 2022’s sales of $229 billion. This far exceeded the 3.4% rise in dollar sales among national brands suggesting consumers are increasingly opting for private labels instead.

The first half of this year saw significant momentum in private label sales, with dollar sales reaching 8.2% higher than the same period last year. However, later on during the year growth was more modest with only a 1.4% increase in sales. It suggests that there could be a shift back to modest single-digit annual increases like those seen three years ago based on PLMA findings.

The PLMA’s President Peggy Davies expressed optimism about the current state of the industry, highlighting that "the industry is healthier than ever" and private labels now represent one in every five food or non-food grocery products sold in America. She also emphasized that store brand manufacturers are the ones ensuring that these items are available thus showing how pervasive private labels have become within the retail environment.

While dollar sales accelerated impressively, unit sales for store brands underwent a modest change reducing by just 0.1% to 58.1 billion units by 2023. In contrast, national brands saw their unit sales drop more precipitously by nearly 3% to 222.9 billion units.

Circana’s analysis of retail departments indicated positive trends as regards private label sales; nine out of ten departments recorded growth during this period. The highest increase was observed in general food where dollar revenues rose by 10% totaling $42.6 billion and beverages with a record high level at $12.9 billion, an increase of 8.9%.

Further examination of specific food categories highlighted significant growth in several segments. Salty snacks emerged as a standout category, recording a remarkable 25% surge in dollar sales, reaching $2.1 billion. Similarly, shortening and oil witnessed a 14% increase, totaling $2.5 billion in dollar sales, while fresh bread and rolls experienced a notable 12.5% rise, amounting to $3.7 billion in dollar sales.

Speaking about these findings, Davies put a lot of emphasis on store brands that retain their positions in the market as a phenomenon. She stressed the importance for retailers and consumer products firms to have goods that are highly regarded by consumers who want value for money and quality, especially in product areas where they are looking for ways to save. Such a strategic approach, she noted, agrees with the inherent characteristics of store brands and offers an attractive prospect for retailers to satisfy emerging needs among customers.

In conclusion, this research highlights how private labels have become more resilient and important in the retail environment. In response to increased consumer preference towards private labels based on price and quality considerations, manufacturers and retailers can take advantage of this trend by introducing innovative competitive store brand items across different product categories.

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